Posts Tagged ‘Loan’

Loan Modification Help Center ? President Obama Continues to Pass Legislation

The Wall Street Journal reported in July, 2009 that President Obama is now expanding the plan to help the number of borrowers who can refinance their homes.  The administration said that borrowers with mortgages worth up to 125 percent of their home’s value will now be eligible to refinance under its program, up from a 105 percent limit.

According to the new plan, borrowers must be current on their mortgages and have loans owned or backed by government controlled mortgage companies Fannie Mae or Freddie Mac.  One of the challenges with the government plan is that it does not help those who are in severe circumstances, either behind on payments or facing foreclosure.  The plan does expand the opportunities for those not facing foreclosure to get help, but if you are in the midst of a foreclosure proceeding or if you just received a foreclosure notice, you need some other form of assistance.

The government is hoping that by raising the percentage, many more Americans will be assisted in getting the help they need to stay in their homes.  Recent statistics state that almost 30 percent of American homeowners with mortgages owe more than their homes are worth (according to Economy.com).  The government’s initial plan seems to have fallen short of expectations as only 20,000 people were able to participate in the program, well short of the 4 million it was projected to help.  In fact, as late as April the government was denying there was any need to expand the program.

Interest rates have actually been rising of late, making things even more difficult for Americans.  Rates on 30 year fixed rate loans currently average 5.49 percent, up from a recent low of 4.84 percent in April.  Government agents hope that this plan will also lower the overall risk for Fannie Mae and Freddie Mac by allowing more people to stick with their mortgages and not default.

Loan modification attorneys are still working tirelessly, throughout California, to help people renegotiate the terms of their loans and get a better mortgage payment.  While the government is having a hard time with their refinancing program, California loan modification attorneys are spending morning, noon and night keeping people in their homes through California loan modifications.

A loan modification renegotiates the terms of your home loan, helping you get lower payments that you can actually pay.  Rather than see your home go through foreclosure and having to move, you can enjoy a new level of financial freedom as well as a renewed outlook on life.  With the unemployment rate in America continuing to rise and the financial future in doubt for many Americans, now may be the time to take advantage of a loan modification.  A loan modification attorney can work with you to get the best deal possible, and make sure that your interests are focused upon.  Lender driven loan modifications focus on the lender’s needs, and even some government programs focus on the government’s bottom line.  A loan modification attorney can represent you and you alone.

Saving Thousands with a Loan Modification ? Debt Settlement Combination – Felmdan Law Center

A grinding recession has put already struggling homeowners in a position where household debt loads are quickly becoming unmanageable. Loan modification has become a well known remedy for those experiencing hardships including toxic mortgages, job losses, being underwater on the house, divorce, etc. It has been widely reported that fully half of these modifications end up back in default within six months. Recently Fitch Ratings published estimates that the re-default rates on mortgages would rise to 70% by yearend 2009 due to inadequate terms on the loan modifications and additional household debt that isn’t included in calculating a what a homeowner can actually afford to pay on the monthly mortgage payments.

Once a homeowner has engaged a firm to negotiate a loan modification on his behalf, entering a debt settlement process can double or triple the decrease in monthly payments gained from a loan modification by itself. The debt settlement aspect of this combination has several advantages in terms of the loan modification and the benefits that would accrue outside of it:

1) Monthly consumer debt/credit card payments are typically cut by 50% within one month of starting the process.

2) The documented decrease in consumer debt payments makes the overall financial picture of the homeowner look much better. As lenders broaden their scope to account for consumer debt and ability to pay after a loan modification, the decreased payment as a result of the debt settlement could be the difference between getting a loan modification and being denied.

3) Engaging in a debt settlement will hurt the credit score of the consumer/homeowner but credit scores aren’t a major factor in determining whether a loan modification will be accepted or not. Acceptance for the loan modification is mostly contingent on ability to pay meaning that a debt settlement, even accompanied by a declining credit score, can help make the case for a modification.

4) The timing for completion of debt settlements varies from eighteen to forty-eight months during which time the credit score of the borrower will decline. Over time, as each account is paid off in the settlement the borrower’s credit score will begin to increase. Concurrently, initial interest rates on a new loan modification are typically set for three to five years before payment increases start to go into effect. An attorney negotiating the terms of a loan modification to coincide with completion of a debt settlement can put his client in a position where the homeowner could apply for a refinance at a time when his credit scores are on the upswing.

5) Even if a refinance is not available to the homeowner, timing the conclusion of the debt settlement process to precede the first interest rate bump on the modified loan proves to be advantageous as the homeowner/consumer would have additional cash flow as he finishes his payments to the debt settlement.

For consumer/homeowners with burdensome mortgage and consumer debt payments, combining the two processes can make a significant difference in cash flowing out of the household, the difficulty in managing the debt, and dealing with the possibility of foreclosure. Have attorney assess your total financial picture so that the two processes can be synchronized for optimal results.              

Feldman Law Center – The Four Road Blocks That are Slowing Loan Modifications

Hope and optimism emanating from the announcement of the Obama Administration’s “Making Home Affordable” plan have been replaced by the cold reality that the program has gotten off to start deemed by industry watchers as “anemic”. After almost four months since President Obama first announced the $75 billion mortgage rescue effort, the administration continues to tweak the program in an attempt to reach its originally stated objective of saving up to 5 million homeowners from foreclosure. Standing between the anemic start and lofty goals of the program are four roadblocks:

1) Overloaded loan modification processors – While the specifics of the plan were released in the first week of March, lenders couldn’t start handling applications until systems were re-programmed and processors were brought up to speed, which took an additional four to six weeks. Processors were immediately buried with stacks of applications that had been accumulating during the conversion to the new guidelines. Participants in the process report that servicers are still digging out from the initial rush as applications continue to flood their desks. Troubled borrowers, many backed up against the possibility of foreclosure, have become increasingly frustrated to the point where they have abandoned the process to retain their own legal assistance.  JP Morgan Chase spokesman Tom Kelly recently said of the ramp-up, “It’s an enormous task. We’re moving quickly, although not as quickly as an individual might wish.”

2) Investors – The massive sums of money that supported the real estate/mortgage boom came from investors on Wall Street, pensions, and other institutions. Servicers say those investors are now balking at some of the terms being presented when a loan needs to be modified. The net present value test, a little known aspect of the plan, allows for a calculation to determine whether the greater return for investors will be achieved via modification or foreclosure. In the modification versus foreclosure decision, investors have been threatening lawsuits against servicers when the servicers are deemed to not be acting in the best interests of their investors. The threatened legal action adds another layer to the home loan modification process and can draw out the approval process even more. The “safe harbor” bill recently passed by Congress was intended to alleviate that logjam by protecting servicers from investor lawsuits but it’s likely that lawsuits will arrive on the servicers doorsteps anyway, safe harbor or not.

3) Lenders – Lenders are caught in a three sided bind between the above mentioned borrowers/investors and their own capital structure. No longer required to mark their loans to market, they can carry the value of the loans in their own portfolios at values they can rationalize, whether factual or not. Loan modifications could generate reviews of portfolio values, and nobody wants to go there in the current environment.

4) Unemployment – According to John Taylor, head of the National Community Reinvestment Coalition, “Unemployment is becoming a bigger factor than almost anything.” When sub-prime mortgages started blowing up it was attributed to the risks inherent in lending to lower quality borrowers. Increasing unemployment, in addition to taking down the lower quality borrowers, is now hitting prime mortgages. In fact, primes are now going into default at a much faster rate than sub-primes as previously solid borrowers are now being affected by the contracting economy.

Of the four roadblocks, the toughest barrier is unemployment due to the fact that, regardless of credit scores, if a homeowner doesn’t have a job a loan modification isn’t going to help. Short sales, cash for keys, or foreclosure become the next options. At that point every side of the three sided bind ends up on the losing end.

Feldman Law Center ? Five Steps to a Loan Modification

If you check the stock market on Monday, people will be saying the market is up and everything is looking better financially.  If you check the market on Tuesday, all economists will be in complete agreement that the world is going to end in 48 hours.  What does this mean for you?  No one, not even the “experts,” have any clue where the economy is going or how long it will take for the country to climb out of this “Great Recession.”

Real estate has been a nightmare for many people as well.  One minute the housing markets look great, and yet with unemployment at a 25 year high and climbing, no one has any idea what the future will bring.  This affects available homes, available credit, interest rates and more.  There is very little sure footing in today’s market, but with a loan modification, you could be closer to security than many other people.

Five Steps

Here are five steps you can take to get a loan modification:

1.    Do your homework – Read as much as you can about loan modifications.  While at work, while watching the ball game, while you are eating lunch – read and learn about loan modifications.  This will only enhance your understanding of the industry and give you a sense of what a loan modification can do for you.

2.    Get your ducks in a row – It is important to have your financial paperwork in order to get the loan modification that is going to work for you.  That means tax returns, pay stubs, bank slips and more, all from the last few years.  A bank is going to want to see your financial history, as well as your current financial situation in order to make a decision.

3.    Talk to your spouse – You cannot get a mortgage loan modification without having the assistance and agreement of your spouse.  While your financial situation may be dire, you must work together in order to make this happen.

4.    Find a loan modification company – You can always attempt to get a loan modification on your own, but having a highly qualified loan modification attorney working with you might be the necessary help you need.  Knowing how to fill the application out, how to file the paperwork, how to organize the communication between your side and the lender and much more can all be helped by a loan modification attorney.  You wouldn’t go to court without an attorney, so do not try getting a loan modification without an attorney.

5.    Calm yourself – It is important to be patient and understanding with yourself and your situation while trying to get a loan modification.  It can be very easy to overreact and lose your calm.  In fact, more marriages end because of financial troubles than for any other reason.  So, giving yourself, your spouse and everyone else around you some slack will keep your relationships and your life in a good place.

Contact a loan modification attorney today, and begin the process of staying in your home.

Visit us at http://www.feldmanlawcenter.com or call 800-588-0425.

Feldman Law Center ? Loan Modification FAQs

You may have a number of questions regarding loan modifications and how they can help you avoid foreclosure.  Loan modifications have been all over the news lately.  President Obama has passed major, historic legislation giving homeowners more access to loan modifications; the California legislature has also passed legislation promoting loan modifications.

Here are some questions and some answers for loan modifications:

Q: What is a loan modification?

A: A loan modification is an agreement between a lender and a borrower to change the original terms of a loan in order to make payments more affordable.  For homeowners, a California loan modification could be a way to stay in their home.  A loan modification attorney can be a major asset when trying to get a loan modification.

Q: How can a loan modification be accomplished?

A: There are actually a number of different ways to get a loan modification.  The interest rate on a loan can be either lowered temporarily, or permanently set at a lower rate.  An adjustable rate could be set to a fixed rate.  The term of the loan could be changed, from say 30 years to 40 years.  There could be a principal reduction of the loan amount.  There are other ways and you could also have any combination of options.  All of this is geared towards lowering your monthly payments and making your mortgage more affordable.

Q: How common are loan modifications?

A: As the real estate crisis continues, loan modifications are becoming increasingly common.  Loan modifications have been around for a very long time, but only when many people are in danger of losing their homes does everyone begin to ask questions.  Some think loan modifications are a new invention, or a scam, but people with mortgages have been getting loan modifications for quite a while.

Q: Does the federal of California state government play a role in loan modifications?

A: As so many people are suffering due to the economic crisis, President Obama and the California legislature have passed various laws pressuring lenders to offer loan modifications.  Lenders are not opposed to loan modifications, especially at a time when so many Americans are facing foreclosure.  A foreclosure hurts the banks’ bottom lines, and the industry has already seen hundreds of billions of dollars in financial loss due to the mortgage crisis.  California passed a law in 2008 promoting loan modifications, and in early 2009 President Obama wasted no time in helping people get the loan modifications they need to stay in their homes.  With Freddie Mac and Fannie Mae in serious trouble due to foreclosures (both of which are federal entities), it behooves the federal government to act that much quicker in saving people’s livelihood.

As you can see, there is a lot of information out there on mortgage loan modifications, and many people are unaware as to whether or not they qualify.  If you are facing foreclosure or facing another financial crisis, contact a qualified California home loan modification attorney today and get “in the know.”

Visit us at http://www.feldmanlawcenter.com or call 800-588-0425.

Auburn to hold public hearing on $4M loan

Auburn to hold public hearing on $4M loan
The City of Auburn proposes to amend its Community Development Block Grant (CDBG) 2010 – 2014 Consolidated Plan and 2010 Action Plan.

Read more on WSFA 12 Montgomery

What You Need To Know About Adjustable Rate Mortgages (Arm) ? Loan Modification Help Center

Everyday we read about the worldwide financial crisis and, specifically, about the U.S. banking and housing crisis.  To understand the challenges facing borrowers during the Housing crisis, it is critical to understand adjustable rate mortgages – how they work and how they can impact you. 

ARMs offer both advantages and disadvantages. Unlike a fixed-rate mortgage, an ARM provides interest rates that change periodically – and payments that go up or down accordingly.  At first, lenders generally charge lower interest rates for ARMs and this makes an ARM easier to afford initially.  If interest rates remain steady or move lower, this can work to your long term advantage. It is important, however, to weigh the risk that if interest rates increase in the future, so will your monthly payments. 

The initial rate and payment on an ARM will remain in effect for a limited period–ranging from several months to 5 years or more. After this initial period, the interest rate and monthly payment may change at regular intervals – every month, every year, every 3 years.   This period between rate changes is called the adjustment period.

The interest rate on an ARM is determined by two things: the index and the margin. The index is usually a standard measure of interest rates and the margin is an extra amount that the lender adds. If the index rate goes up, so does your interest rate and monthly payment.  On the other hand, if the index rate goes down, your monthly payment may go down. Not all ARMs adjust downward, however so be sure to read the details about any loan you are considering. 

Lenders base ARM rates on a variety of indexes. You should ask what index will be used for your ARM, how it has fluctuated in the past, and where it is published.  

The margin may differ from one lender to another, but it is usually constant over the life of the loan. The fully indexed rate is equal to the margin plus the index. For example, if the lender uses an index that is currently 4% and adds a 3% margin, the fully indexed rate would be 7%.

Some lenders base the amount of the margin on your credit record – the better your credit, the lower the margin. In comparing ARMs, look at both the index and margin for each program.

An interest-rate cap places a limit on the amount your interest rate can increase. Interest caps come in two forms: A periodic adjustment cap, which limits the amount the interest rate can be adjusted up or down from one adjustment period to the next, and a lifetime cap, which limits the interest-rate increase over the life of the loan.  By law, virtually all ARMs must have a lifetime cap.

In addition to interest-rate caps, many ARMs limit, or cap, the amount your monthly payment may increase at each adjustment.  A payment cap can limit the increase to your monthly payments but also can add to the amount you owe on the loan. This is called negative amortization.

If you are considering an ARM, ask yourself: 

– Is my income enough–or likely to rise enough–to cover higher mortgage payments if interest rates go up? – Will I be taking on other sizable debts, such as a loan for a car or school tuition, in the near future? – How long do I plan to own this home? If you plan to sell soon, rising interest rates may not pose the problem they do if you plan to own the house for a long time. – Do I plan to make any additional payments or pay the loan off early?

Golden Rule:  Before you consider any loan, ask questions and read the details. For information and news please visit Loan Modification Help Center